* - Gross billings and Adjusted EBITDA are non-GAAP financial measures. Refer to the definitions and reconciliations of these measures under “Use of Non-GAAP Financial Measures”.

Management Commentary

“IZEA kicked off 2019 with a strong Q1,” said Ted Murphy, IZEA’s Chairman and CEO. “The significant top-line and bottom-line improvements reflect a concentrated effort to drive growth while increasing operational leverage and efficiency throughout the organization. Our focus on SaaS licensing and marketplace fees have had a dramatic positive impact on the organization. We have seen significant growth of IZEAx licensing revenue in particular and believe the recent release of IZEAx 3.0 will further bolster our sales efforts throughout the year. At the end of Q1 our total SaaS licensing fees under contract for all platforms in 2019 have already exceeded total SaaS licensing revenues for 2018.”

“While we are pleased with our revenue growth and margin improvements in the quarter, we believe we can grow faster and gain more leverage,” continued Murphy. “The completion of our recent $10 million common stock offering will enable us to make strategic investments in areas of the organization where we see opportunities to drive meaningful topline growth and operational efficiencies, particularly with our SaaS revenue lines. While we remain focused on responsibly balancing investment with profitability, we believe there is a large addressable market for our services and we seek to gain a larger share of that market. IZEA will be investing in increased marketing activities, sales staff, and engineers to further increase our leadership position in the influencer marketing space. We are actively pursuing several of these investments and expect to begin to see the benefits of those investments later this year, particularly during the holiday season.”

Q1 2019 Financial Results

Revenue in the first quarter of 2019 increased 23% to $4.8 million compared to $3.9 million in the corresponding quarter of 2018. The increase was due to by revenue growth in our license fees and marketplace spend, both of which stem from our 2018 acquisition of TapInfluence.

Total costs and expenses in the first quarter of 2019 were $6.5 million compared to $5.8 million in the corresponding quarter of 2018. This comparison includes two one-time non-operating items, both of which contribute to the comparative increase. In Q1 2018, we recorded a gain of just over $300 thousand associated with adjusting our accrued acquisition costs to fair value, and in Q1 2019, we recorded a loss of $190 thousand, associated with our 2019 settlement of a portion of our accrued acquisition costs. Excluding these one-time items, our total costs and expenses increased primarily due to increased depreciation and amortization expense.

Net loss in the first quarter of 2019 was $1.8 million or $(0.15) per share, as compared to a net loss of $2.0 million or $(0.35) per share in the corresponding quarter of 2018, based on 12,602,437 and 5,802,099 shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) in the first quarter of 2019 was $(874,000) compared to $(1,850,000) in the corresponding quarter of 2018.

Cash and cash equivalents at March 31, 2019 totaled $2.3 million. At the end of the quarter the Company had accessed approximately $1.3 million of its $5.0 million credit line.

IZEA completed a $10 million public offering on May 10. The net proceeds, after the underwriting discount, but before estimated expenses of the offering payable by IZEA, are $9.4 million.

Conference Call

IZEA will hold a conference call to discuss its first quarter 2019 results on Monday, May 13 at 5:00 p.m. Eastern time. Management will host the call, followed by a question and answer period.

The conference call will be webcast live and available for replay via the investors section of the company’s website at https://izea.com/. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. A replay of the call will be available after 8:00 p.m. Eastern time on the same day through May 20, 2019.

IZEA Worldwide, Inc. (“IZEA”) operates online platforms that connect marketers with content creators. IZEA platforms automate influencer marketing and custom content development, allowing brands and agencies to scale their marketing programs. IZEA influencers include everyday creators, as well as celebrities and accredited journalists. Creators are compensated for producing unique content such as long and short form text, videos, photos, status updates and illustrations for marketers or distributing such content on behalf of marketers through their personal websites, blogs and social media channels. Marketers receive influential content and engaging, shareable stories that drive awareness. For more information about IZEA, visit https://izea.com/.

Use of Non-GAAP Financial Measures

We define gross billings, a non-GAAP financial measure, as the total dollar value of the amounts earned from our customers for the services we performed, or the amounts charged to our customers for their self-service purchase of goods and services on our platforms. Gross billings for Content Workflow differs from revenue reported in our consolidated statements of operations, which is presented net of the amounts we pay to our third-party creators providing the content or sponsorship services. Gross billings for all other revenue equals the revenue reported in our consolidated statements of operations.

We consider this metric to be an important indicator of our performance as it measures the total dollar volume of transactions generated through our marketplaces. Tracking gross billings allows us to monitor the percentage of gross billings that we are able to retain after payments to our creators. Because we invoice our customers on a gross basis, tracking gross billings is critical as it pertains to our credit risk and cash flow.

“EBITDA” is a non-GAAP financial measure under the rules of the Securities and Exchange Commission. EBITDA is commonly defined as “earnings before interest, taxes, depreciation and amortization.” IZEA defines “Adjusted EBITDA,” also a non-GAAP financial measure, as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals or impairment, changes in acquisition cost estimates, and certain other non-cash income and expense items such as gains or losses on settlement of liabilities and exchanges, and changes in fair value of derivatives, if applicable.

We believe that Adjusted EBITDA provides useful information to investors as they exclude transactions not related to the core cash operating business activities including non-cash transactions. We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations.

All companies do not calculate gross billings and Adjusted EBITDA in the same manner. These metrics as presented by IZEA may not be comparable to those presented by other companies. Moreover, these metrics have limitations as analytical tools, and you should not consider them in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. A reconciliation of non-GAAP to GAAP results is included in the financial tables included in this press release.

Safe Harbor Statement

All statements in this release that are not based on historical fact are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “may,” “will,” “would,” “could,” “should,” “expects,” “anticipates,” “anticipates,” “estimates,” “believes,” “intends,” “likely,” “projects,” “plans,” “pursue,” “strategy” or “future,” or the negative of these words or other words or expressions of similar meaning. Examples of forward-looking statements include, among others, statements we make regarding expectations concerning IZEA’s ability to increase revenue and improve Adjusted EBITDA, the use of proceeds of IZEA’s stock offering, expectations with respect to operational efficiency, and expectations concerning IZEA’s business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including, among others, the following: competitive conditions in the content and social sponsorship segment in which IZEA operates; failure to popularize one or more of the marketplace platforms of IZEA; inability to finance growth initiatives in a timely manner; our ability to establish effective disclosure controls and procedures and internal control over financial reporting; our ability to satisfy the requirements for continued listing of our common stock on the Nasdaq Capital Market; changing economic conditions that are less favorable than expected; and other risks and uncertainties described in IZEA’s periodic reports filed with the Securities and Exchange Commission. The forward-looking statements made in this release speak only as of the date of this release, and IZEA assumes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as otherwise required by law.